tv Bloomberg Surveillance Bloomberg December 9, 2014 6:00am-8:01am EST
expect the unexpected. advertising faces seismic shifts. , come on,nd duchess kate, try some gummy bears. good morning, this is "bloomberg surveillance." we are live from our world headquarters in new york. i am tom keene. joining me, scarlet fu and brendan greeley. we need sometime headlines. >> we are singer global selloff today and it is being led by the biggest drop in chinese stock since 2000 nine. the index dropped more than 5% after the government tightened collateral rules for short-term loans. between of ember 21st and anderday, it had sort 21% had closed at its highest in 2.5 years. oil prices keep plunging. they have not been as low analyst 5.5 years. west texas intermediate rebounded slightly today.
inq is joining saudi arabia cutting customers for the biggest customers in asia, a sign opec members will do what is necessary to preserve market share. >> we may see a significant shift by the federal reserve's open market committee as their meeting next week, considering whether to drop their promise to hold interest rates low for "considerable time." dennis lockhart says he is in no rush because they are still danger of raising rates too soon. amazon is looking for ways to deliver your package is sooner. biken is testing messengers from one hour deliveries here in new york. the company is threatening u.s. regulators over the use of drones. amazon has told regulators it has started testily brees by drones -- test deliveries by drones and other countries. >> the duke and duchess got to see all cans of royalty last night. prince william and kate went to
the berkeley center in brooklyn. the brooklyn nets took on lebron and the cleveland cavaliers. they had a chance to meet pop royalty. how do you say it? >> beyoncé. >> beyoncé and jay-z. lebron james, the cavaliers took it to the nets. them cleveland jerseys, one for boy george. william and kate wind up their new york trip. this is fun. come on. >> did the carlyle know you were stalking them yesterday? >> i was. i will be there and hopefully, they will make an appearance. >> i hope the age rink gin martinis and not vodka martinis. >> maybe the carlyle is an fancy enough. >> they wanted to go to brooklyn, but it was too expensive for them.
>> let's get a date is checked. it is a not market. futures negative six. everything else firms up this morning, even oil. 62.25.ff, 63 .63. on to the next screen. the two-year yield in a little bit. dollar-canada, one dollar 15. let's look at the damage. here is oil. down we go from 100. textbook chart. if you expand this out, here is the test. down we go, up, and we just rollover again today. >> the last couple of weeks we have been drawing distinctions between importers and exporters in the markets. the selloff we saw yesterday was
everywhere. all the emerging markets, regardless. >> totally agree. the background story is from conoco phillips and the others, you begin to see the reality in a real economy. >> they have to make firm decisions about how they spend money and budget things for the coming years. these are five-year, 10 year plans. collapse in oil prices has them rethinking. >> i did something for the first time. i highlighted something in the ft. >> congratulations, brendan greeley. >> it measures the strength of writing developing country exchanges fell to its lowest level since 2000. sorry, since it began in 2000. >> it is the most mathematically savvy. the goldman sachs index is way down. the answer is, all of these charts look sporty. then you see the china repo deal. >> i'm surprised you did not bring up that chart. it is in need of a correction. they go straight up and
overnight action, comes down a little bit because of this move. >> just a little baby bump, that's all it is. >> not a baby bump at all. >> she is expecting in march. boy or girl, have we heard? >> i thought you would be on top of this. >> and ultrasound? they're doing a lot of charity work. prince william meeting with the president yesterday on wildlife, which has reached a critical point. what about technology? >> apple trades at four-time sales. you been looking at the numbers. >> then there is hewlett-packard. .ll part of the frenzy it is a great bull market. buffeted by oil and a new global mediocrity. brian wii's are is fascinating. totally twisted. he mixes one part technology, to parts advertising, shakes it forever.
wide body.cross a are you a tech guy or advertising guide today? of myself asthink mostly advertising. technology just covers everything. >> what does global wall street you do know about the paulson number taxing and what is the single message you have? i think of "mad men" and the shift. what is the shift? >> creative destruction. we have a lot of growth going on in digital. with a lot of weakness in what is normally called traditional media, whether it is television or otherwise. i think there is a common view what is going on is tv advertising is shifting to the web. that is happening on the margins, but was most are missing is you look at the spinning from the priceline's, expedia, ebay, google, they are expanding. expanding 30% year over year on average. >> he is not -- it is not moving
from tv to digital? >> what i'm curious about, we're watching these indicators on tom's mac monitor. what is the one indicator they're looking at? figures, aoeconomic figure -- macro economic figures, you talked about oil ,rices falling off by 50% forecast yesterday objected to inting to 1.5% increase total economic growth. that could played advertising growth. it is interesting. >> what is the mood right now? i can't get a handle if advertisers are saying, this is great, let's go 2015. >> today their waking up and the web.bout fraud on there's a trade group for large marketers publish this morning that talked about the scale of
this and that is going to be a major issue. it is a big deal. there's a lot of confusion and fear among the big brands. >> you are based in portland, oregon. what do see in advertising the guys here miss out because they're so focused on the details? >> i do stay in close contact with new york. i would add, portland, oregon or arguably the best agency best awarded agency. >> we are sports. we talk about sports all the time. is sports just going to reign supreme in the next year? >> sports is not holding up quite as well as everyone expected. when they added an extra nfl schedule, it only spread sports advertising dollars around rather than adding more money. >> so we jumped the shark there. >> tom is desperate to know whether we're seeing a demographic shift in the u.s. away from traditional sports
like football and toward soccer. that is exactly what he was going to ask. >> it is happening. the world cup did wonderful last year. i don't know if we're quite there yet. last year andaudi they said any year that is a soccer city is an audi city. >> that's fair. i think subaru parts seem to be very popular ,prius as well. >> your historic on facebook early on in those days -- ugly days, are you able on these modern new stocks as you look at traditional advertising? furtherance? >> right now they are cheap. the market presumes these companies are declining. an cash yields is digital on ongoing basis. i was no way they can produce these kinds of cash yields. facebook will also do
wonderfully. there is no reason they can't both to find. >> but facebook versus five, and cbs is a different story. >> similar upside. >> can you quantify that? >> 40% above where stocks are trading right now. >> you just said cbs is cheap? >> they do a lot of buybacks. >> and you still considered a cheap stock? >> oh, sure. google, theysider are going to see margin erosion on an ongoing basis despite selling topline gain. every new business i get into his lower margins than the one previously. >> brian wieser with us this morning. >> surprising news television advertising is not doing so great. therembers are just not to back it up. we will continue this discussion with our guest host wieser. we want to bring you our twitter question of the day -- collateral ofthe
>> good morning, bloomberg television. executive, chief officer of blackrock on "market makers." good tuesday morning. i'm tom keene with scarlet fu and brendan greeley. futures, negative seven. dow futures, -55. could even the lyrics save advertising this year. it grew only 1.1% -- not even the olympics its eight
advertising this year, it grew only 1.1%. magazine ads were down 7%. newspapers, down 9%. there was growth at least an internet stock. everywhere else, there was a blood bath. where did this come from? >> a large chunk came from what i call the web. you have some incremental growth common from the large brands. their shifting spending primarily from print media. there also shifting some on the margins from tv. >> these new companies are a bit like millenials. that come of age and don't think about tv. >> the timeshifting numbers is incredible. 14% drop between 18 to 24-year-olds. speaking of millenials. you still have people watching television, what are they watching besides live sports? of mostan still reach
every 18 to 24-year-old on tv. relative to the alternatives available, it is still a wider reach than a missed any other alternative. >> nothing comes close. >> no. >> that's interesting. that will change the dynamics of their spending. i'm wondering if we could bring up the full screen we talked about yesterday, the quality of tv programming. you introduce the question about, what is tv? your point is, web companies, tvoo!, could become advertisers if only they would improve quality of their television. >> this is an amazing opportunity left on the table. when yahoo! greenlight the committed he, that is a wonderful baby step. they might see $5 million of revenue. real tv money, no question. but single digit millions, maybe. >> there is a doubt about the quality of the revenue streaming in the internet. i'm saying all sorts of
announcements by all sorts of internet startups that are like, oh, this is great, but. " ine is this massive "but your world about how we're going to make money and bring down the income statement to make a thing called profit. do you have any clarity on that? >> when companies are public, certainly. but the definition of what is revenue becomes subjective sometimes. >> you have to live in portland to make a statement like that. what do you mean, what is revenue? they have to bring in the money. are they? >> you have to have an activity and participate in the new claim it as your revenue. the pastor costs, net profit is our deeply the right number to focus on -- net profit is arguably the right number to focus on. >> digital experiment's are great, but there's this huge but. >> my but, i'm curious as a reformed magazine writer, as are any hope for newspapers and magazines? >> no.
that will be some titles do fine. we can see titles like "the certaint" and fashion titles will do fine. >> that's it. >> basically. >> but everyone else will go in the direction of new republic? >> let's hope not. >> we're been talking about the new republic as it it is a cultural problem. >> there is a better alternative for the exact same goal. >> this is an uplifting conversation. the former magazine writers -- >> thankfully, there is tv, which grew 1.1%. we're going to be great. >> if it is in fact a cyclical element causing it to be so weak, it is not such a bad situation. >> very good. we will continue with wieser. coming up, we will take a look at the oil markets.
brian wieser with us that made a historic call on facebook. he says, higher over $100 a share. my basic take is this, brian. facebook fail. facebook fail. facebook, wow. almost like a five to one ratio. how do you stop facebook in 2015? >> i don't think you do. >> they are the genie out of the bottle. >> where you start your most internet activity, it is still facebook. >> what he talked about earlier, do you just assume all media has to adapt to the newsfeed, whether printed, whether video, even whether audio? >> it is an important part if you're a publisher, as a publisher strategy -- >> can they block that? >> i don't know. >> i don't see it. they just disappear. it is fascinating.
>> is twitter journalism -- do you consider twitter journalism? >> there is journalism on twitter. >> is there? >> if you write things for living, is there way to survive in this world? businesses, i think are plain different business models. the same with music industry. >> those are working with the margins. i keep hearing about new business models for journalism, and everyone comes down to charity. fine andconomist" is you do fine. >> what is one business model that is working? >> i don't know. that is why you need room for innovation. >> that is why you need a benefactor. >> that would get it over the help. >> what happens to the facebook newsfeed?
if i customize my facebook to get brendan greeley business week articles or whatever scarlet fu's is to graham, and my right, hundreds of leads a people use that -- instagram, am i right, hundreds of millions of people use that? >> it is a pretty important get condo for a lot of people. -- conduit for a lot of people. most people look at more than one site, not just facebook. >> there is a part you won't customize. you really have to be a power user to do it. >> i think most people don't. >> scarlet, on sports, you see the new york rangers and the others in the nhl using facebook , video, news feeds to highlight the game far more aggressively. you wonder if all of sports follows? >> they cannot afford not to. and her -- i wonder what extent they have with linkedin.
linkedin feeds are even less interesting unless you customize them. >> linkedin is a totally different beast. >> but they're trying to be something else. >> i don't think they will be. >> to tom's must-read about journalism, what we're learning, the journalism and shifting. the shift where looking at from editor to algorithm. we are not going to get out of the space where algorithm picks what you read. >> it will be diminishing. >> you do the math, income statements, the balance sheets. where is the money made in the shift? advertising,g, advertising -- >> by facebook, facebook, facebook. >> does it start to fall apart? are we in the ninth inning of an unprofitable part of the world? maybe. there is still growth to be had. >> are they looking at subscriptions? >> i don't think so. >> you will be --
>> there's so much money to go there. >> why would you screen out your best customers? >> ryan wieser -- brian wieser joining us from portland, oregon today. the most disruptive ideas of the past 85 years. 85th anniversary of business week. they, steve wozniak in apple one. that is coming up. our twitter question of the day as well -- us.t ♪
>> good morning, "bloomberg surveillance." we welcome you this morning, scarlet fu and brendan greeley with me. >> a global selloff led by the biggest drop in chinese stocks since 2009. shanghai index dropped to more than 5% after the government tightened collateral rules for short-term loans. between november 21 and yesterday, it had soared 21%. the university of virginia will lift its ban on more than 30 fraternities and the related activities, according to the school's president. those restrictions have been in place since november 22 following the revelation of an alleged 2012 gang rape at a fraternity house. the alleged sexual assault was and tod and announced -- announce a rolling stone story.
orion is back on dry land. nasa's new spacecraft reached san diego yesterday after a test flight in it with a plunge into the pacific ocean. a navy ship deliver the capsule and unloaded the 11 foot tall cone. it made an unmanned flight friday they carried it ready 600 miles above earth. during retreat, the spacecraft injured speeds of 20,000 miles per hour and temperature's new 4000 degrees -- during entry, the spacecraft reached speeds of 20,000 most per hour and temperature's near 4000 degrees. just likeozniak making computers. he gave away his designs for free than met steve jobs. this is one of my favorite videos will stop take a look. >> we have the very first computer we ever built, long before we started a company. i can wired the entire bottom. that was the first apple one computer ever. >> [indiscernible] >> it is in my heart.
those are the most incredible times. the summer i built the apple one computer, i was totally aware a revolution was supposed to start. i have been showing off my computer. i had given away my designs for free for the apple one. steve jobs came into town, would pop into town to see what i was up to. the latest thing the design for fun, then somehow turn them in to money for both of us. paul terrel owned a store in mountain view. me demonstrating my computer. steve jobs when and sell him some of our little boards rebuilt for $20. he said, nope. people want to buy a prebuilt. they won it ready to go. $250 to build and we would sell it for $500. the regional price was $666 and 66 ends. -- $666.66. the garage is a bit of a myth.
thanpresents is better anything else, but we did know designs there. we would drive the finished products to the garage, make them work, then drive them down to the store that paid as cash. we outgrew that garage quickly. there's a longer version of the video on the web and it shows steve wozniak hand soldering together and apple two. they're such joy and facility in the way he does it. you understand a lot more about the beginning of apple computers than i had ever understood before. >> it is visceral, the engineering behind it. it goes to innovation. , now looking at finance and investment, but what it looks for an ecosystem. apple is the ecosystem. does apple control advertisers? >> well, more broadly, but what apple is done in terms of what
the iphone has done and the ipad has done and just making it possible to consume content more eloquently and seamlessly in a mobile environment, that really has had a more profound effect on advertising than whatever happened inside of an apple -- >> what about banner ads? >> bread and butter. >> are there banner ads on cell phones? >> yeah. >> i never look at them. >> they are effective because you cannot close them because they're too small. >> apps are what people 10 years, and not banner ads. zuckermane to ethan and once upon a time, he was responsible for creating the pop-up. he wrote a me a couple -- a me a mea culpa. >> if you give someone a pop up,
they may click on it accidentally and the irritated. it doesn't mean it works in a brand building sense. it might actually do what the advertisers -- >> we talk about moving beyond banner ads and creating a whole experience. that is the holy grail. tom is saying, hogwash. is that true? >> i would suggest it happens when you think of conferences media owners offer. brian, business insider has a good thing going. they have a scotch ad left and right. i won't buy that scotch because it is in my way. mi a minority? >> you probably are a minority. we don't to think about all the ways in which advertising and access, especially if there's a brand-space goal. >> i don't feel like scotch ever gets in my way. previously about
all of these efforts and i laud their courage and your new world, but when you look at the apple, the six, the six plus, it becomes ever bigger where advertising is controlled by the toys. >> that is the big long-term , handsetcarriers become. it does become a risk. >> i think it is a huge risk. itit is a risk, but i think is maybe overstated to some degree. they push too hard and look at regulatory risk, too. >> there is that as well. bloomberg business week the great disruptor special will be airing at 9:00 p.m. eastern. we will look a seven innovators whose ideas have changed the world including steve wozniak and the apple story. coming up, the winners and losers among big cities in attracting new challenges -- helen. personal best chart is next. this is "bloomberg
doing a little bit better. a little bit of a bit the last three hours on the 63 handle on the west texas intermediate. let's get to our single best chart. is based in portland, oregon. according to the new numbers, portland is the 10 fastest-growing big city in the u.s. between 2000-2013. its population growth clocks in at 12%. we stuck it up against other big cities. texas cities like ft. worth and austan grew faster. so did charlotte. new york only saw 3% growth. washington, d.c., 8%. detroit lost more than one quarter of its population. getting back to portland, the city has gotten a lot of love from popular culture. land."t show "port very accurate. almost everything in that tv series i have experienced
first-hand. >> you go in and ask for the free range chicken? >> it did have an in new york for me for the first time. >> do you live in a tiny house in someone's backyard? >> no, but i know where that house is. i saw goats. >> it sounds almost too good to be true. what is the dark side of portland? >> by and large, the city services are pretty good and it is a pretty well-run city. >> what is the dark side? >>uber. >> there are certain elements that are, shall we say, conservative in and hoover liberal way -- buber liberal way. uber -- has prohibited >> is the city out have to -- alpaca-free? >> we talk to companies. the reason they want to reload to cities like worth, they have
-- people want to be -- >> is portland the anti-dallas? basis is not as strong as we would like. nike and intel are huge employers. but you don't have a lot of big companies driving top growth for the city. >> what is the dark side? >> that is it. >> give us an uber update. >> it is the biggest city on the west coast without any uber. friday evening, i saw an e-mail in miami on saying -- in my e-mail saying, uber is now in portland. saying thank you to the mayor for his courage. unfortunately, the mayor has not approved anything. it gets funnier because
apparently come the city commissioner in charge of this said to the newspaper upon learning from the newspaper in the city that uber was launching -- anyway, it is all a mess. >> uber is no longer in delhi. it was. this is our top photo. --ice are squirting uber driver, accused of raping a woman. in delhi, uber has been blacklisted permanently and can no longer conduct services. that is when you begin to wonder , is this an opportunistic move by the city to get rid of competition or the taxis and rickshaws they have their? >> didn't that driver have a history as well? >> yet also been accused of the same by a taxi driver. the number two photo, this is president barack obama. that is a middle school student adriana mitchell.
the two of them have just fixed healthcare.gov. >> and it only warrants a fist bump. >> this is in honor of science education week. the seven largest school districts in the u.s. will start offering intro computer science courses. >> they should offer linear algebra. >> that would be a good starting point. >> i know the president is about to call you, as he always does, i tuesday evenings for device and how to run the country. james.one photo, lebron number 23. all you can see is "i can't breathe." i wonder if he had to explain that to the duke and duchess as they watched the game last time. several players on both teams wore the shirts. i think that is extraordinary. >> explain. >> we keep learning day by day that what happened after the onlure to pass an indictment
the air garner case is so much bigger than what happened in ferguson. it resonates, easy to understand -- >> and the video is damning. >> the video has made a difference. >> that was lebron james last night. our top photos of the morning. we want to bring you our twitter question of the day. just try and offer more risk or reward right now? tweet us @bsurveillance. ♪
next hour. not only on oil in north dakota, but the view east from saudi arabia over to iran. really looking forward to that on television and radio in our next hour. "bloomberg surveillance." futures, negative seven. let's get to our top headlines. >> a summary of the senate intelligence the cia interrogation report being released today. expected to detail harsh interrogation techniques by the cia after the 9/11 attacks. the report will be the first public accounting of what critics say was torture used against al qaeda detainees at so-called black sites in europe and asia. shares of tesla motors down 14% daysthe last seven trading on growing concern the cheapest gasoline in more than four years will curb enthusiasm for those electric luxury cars. a disappointing november u.s. sales forecast as a pressuring tesla shares. u.s. gas prices haven't dropped -- have dropped for 68 days. that is according to aaa.
back by popular demand, french toast crunch, general mills says it is bringing back the popular serial in response to consumer demand. it was discontinued in 2006 as serial sales declined in favor of healthier alternatives like greek yogurt. a facebook page dedicated to its return as honest 9000 followers. it will be in some stores with a national rollout in january. those are your top headlines. speaking of sugar, for the early-morning "surveillance" we know candy serves as both food and fuel. seeith those categories, we signs of inflation. this is the swing and sugar prices the past two years. both domestic sugar, the white line, and global sugar made five-year lows in january but has outstripped global sugar. we bring in the ceo and founder of dylan's candy bar. discussing the state of this week to business.
welcome. >> happy holidays. mayershey, pez candy increase as well. what do you anticipate in the coming six months? >> candy is recession-proof, so customers are not balking -- >> excuse me, you cannot walk i sidewalkn the damn -- >> people enjoy receiving it and giving it and eating it. >> really, in the dark -- you have been at this since 2001. in 2008 and 2009, people did not buy less candy? >> people bought more candy. i think what people feel depressed or it is a holiday, they crave sugar, especially when it gets stuck earlier, they need serotonin. >> the recession is a bit like a breakup. >> i think of all ages.
they like candy as a treat. obviously, in moderation, but , it becamenostalgia very popular. people love their classics and the heritage. they think it is fun to go back to their childhood. your have some numbers on business, which stunned me. your store sells severed -- 7000 different types of candy. your average consumer is over 30 years old. it is not children. i thought america was getting healthier. >> it is funny. we get a lot of adults and they don't have kids. they're coming in for themselves. like a little treat after a healthy meal. it is for the kid in all of us. it makes you feel young again. it is funny. people love gummy bears and chocolate -- >> what are you wearing on your wrist? >> this is a little built-in chocolate. -- belgian chocolate. our people picky about the
source of sugar? >> we have things for everybody. we have gluten-free, non-gmo, healthier products, sugar free. >> do you notice specifically a switch and the kind of sweetener? >> no. they want a splurge, a treat. we offer the healthier options and we offer things like dark chocolate covered pomegranate and things. i do think people want a treat. they're not really reading the labels when they come to our store. we provide a little bit of everything. >> you are singing from my hymnbook. dark chocolate covered in anything is a dirty lie. you just need the dark chocolate. >> people are not just ordering one scoop of ice cream. >> are you like the cosmetic comps? dispenser, that is three dollars. are you making $2.98?
>> i can tell you our margins. business is good. mentioned moderation. there's a certain former mayor of new york is going after the big slurpees. are you an antidote to slurpees or the threat to the 16 ounce or 32 ounce soda? >> i think in moderation every thing should be ok. >> moderate the dark chocolate over here. few calories a here and there. just a special treat, really. >> i need to say something real quick. much of and watch this. dylan's candy bar is like disney world. we will get there someday. tom, iting of treats, is your special day and we know you insist on not making a big tail out of it, but we could not resist. -- a big deal out of it, but we could not resist. >> picture birthday.
>> busy morning here on my birthday. >> conversation about economics, finance, and birthdays. >> it reminds me of the animal spirit. >> we have more information to get to. >> happy birthday, tom. >> remember -- >> it is tom's birthday? >> it reminds me of my time playing squash at st. paul's and how that dovetail with my experience with what nobody cares. >> let's go to scarlet fu. >> joints at the carlisle -- drinks at the carlisle. >> happy birthday. >> happy birthday. >> happy birthday, tom. >> happy birthday. >> happy birthday. >> hope you have a good one. >> ok. i stopped celebrating a 29. >> you can't stop celebrating,
because we brought cupcakes. that one is dark chocolate. >> in that video, there was a brandon trying to explain his name. andave a brandon, brendon difference.ell the he calls us by what school we went to because he can't -- >> that is the carlisle. tell.carry and no i'm not sure what they have. they might've had chocolate or gummies. >> kate with gummies. >> is that a candy bracelet? >> yeah, it is a candy bracelet. >> the report brought to you by dark chocolate cupcakes. here.rning i can't talk. i'm focusing --
blankfein tightens up the quality of debt collateral. this is oil. expect the unexpected. takes5, the year facebook over the known world of digital in this oil and crisis, saudi arabia is looking east 810 miles. good morning, everyone. this is "bloomberg surveillance." we're live from our world headquarters in new york. it is tuesday, december 9. i am tom keene. joining the scarlet fu and brendan greeley. is being ledloff by the biggest drop in chinese stocks since 2009. shanghai confidence falling after the government tightens collateral rules for short-term laoans. constant had climbed to its highest in 2.5 years. meantime, oil prices continue to plunge. they have not been this low in
almost 5.5 years. west texas intermediate dropped below the $63 a barrel mark before stabilizing this morning. iraq joining saudi arabia and cutting prices for biggest customers in asia, a sign that opec numbers will do anything to preserve market share. >> we may see a shift by the federal reserve open market committee. there considering whether to drop their promise to hold interest rates low for an "considerable time." atlanta fed president says he is that no rush. the considerable timeline which has been in fed statement since last march. amazon is looking for ways to deliver your package is even faster. according to the "wall street journal," amazon is testing bike deliveries. amazon has told regulators have started test delivery's by drone in other countries, and if the u.s. does not let it can type amazon willhere,
divert more resources overseas. >> it is the update you need, a "bloomberg surveillance" b reaksclusive. william and kate went to the berkeley center for an nba game andeen a very brooklyn nets the dreaded cleveland cavaliers. a had a chance to meet our royalty, beyoncé and jay-z. it was courtside seats to watch king james, lebron james, lebron's cavaliers took it. later, lebron gave them cleveland jerseys, one for their son, george. william and kate wind up there new york trip today including a very important meeting of remembrance at the september 11 museum downtown. also, a cartoon which i thought capture the moment. >> william and kate are based in midtown manhattan at the carlisle. >> it is the local bar.
they have a pabst blue ribbon sign. fax tom keene -- >> tom keene an ardent royal watcher. >> then it up going with their second choice, the carlisle. >> a people stay there. >> i feel so naïve. i had no idea of the carlyle existed until tom started talking about it every day. >> there are different carlyles. the bar is for casual, wonderful jazz. >> carlisle of the heart all stays here. >> let's get a data check. everything stabilizing even with the carnage that we see in the oil business. it is always the same. stocks and commodities and currencies do what they do, but the immovable force is the bond
market. overnight, china blinks. they clean up their troubled recall market. oil cannot find a bit, we had to parachute somebody in who understands this. the chairman and chief executive officer out of manchester in england, what do you make of an oil collapse? how do you correlate that over to the equity markets? >> that is a good question. whether oil will stay local or spread out. whether or not this big decline in oil provokes credit problems in the high energy or the emerging market. >> you see that with high-yield debt in america. region --e china china retail market. do you assume it will come in all very quickly? >> the good news for most of the high-yield debt is it has the
least amount of time and refinancing is necessary, so you have a bond market, which is what business wanted. people want to sell, and nobody wants to buy against it. the worst thing i've seen in crude oil is the bullishness of all the suppliers. i am very negative and make a poverty -- in a commodity market. wanted. you go out there, you have a piece of paper to sell -- >> what i'm try to figure out is the oversupply in oil. in the last .4 hours, is it possible to start taking out falling demand for oil? >> microeconomic tuesday with brendan greeley. >> there is not been a significant sign of demand being low. a place like china yesterday, you had an point numbers, up 9%. no, it is a supply story. berkeley have in written about an underestimated
risk in the financial sector given what happened with texas banks in the 1980's. do you share their concern? >> not yet. i would say the general point here, what the energy market is showing use when you keep interest rates too low for too long, and what you have is a tendency to over invest in certain sectors of the economy, so to me, oil is the leading edge of overinvestment. today on theicle right-hand side of the "wall street journal," let's you get out in front of the fed -- are we going to see action sooner rather than later? >> i think in census and the fed is starting to break down. they are managing monetary policy for the bond market rather than for the economy. >> maybe they start managing for the oil market. >> i have a quote i want to bring in, my morning must-read from mohamed el-erian. dear at the verge of a bug no
theoretical limit on to virgins, we are talking about between -- no theoretical limit on divergence. problem is exchange rate shifts represent mechanism for reconciliation, divide between certain market valuations and fund metals has become so large that rice deserve honorable -- that prices are vulnerable to volatility. >> the point i would make is you see through the cycle in which all of this excess liquidity is creating tremendous amount of local volatility. it is not just affects -- fx, it can be certain countries. i think that will be the story for the rest of the cycle. >> how does this compare and contrast to other crises we have seen? the bigger picture of 1998 or 2008, there seem to be discreet actions happening separate. what kind of event would allow this to coalesce? roughly the size of the 1997 correction back in october,
followed in june by another crisis. i'm not sure you can use that as an exact calendar, but my sense is we are heading towards a much more attitude of downtown -- of downside volatility. >> when we get this ball to the -- when do we get this volatility crunch? >> what i think you will have is a sudden withdrawal of capital from public markets. most likely to be the income drain. that is the most potable part of global markets going forward. >> it will happen high-yield credit first? more likelyt it is to be a general worry about interest rates going forward. there is a real mismatch now between where the bond market prices interest rates going forward and the economic reality in the u.s. economy. >> we saw a emerging market currencies moved together yesterday, which i thought was interesting. there is china and everybody else, there is commodity exporters and commodity importers -- how to you divide up emerging markets?
>> i am not sure it matters in the last three weeks of the year. people are just wanting to get out of a certain space. i think within credit, there is a move to the exit. i think it is being provoked by worries about energy, but the energy-producing countries now dominate a lot of the index products. this chart out on bloomberg radio plus, the relationship of japan to china. as you go back to the crisis of , 18, we have that 20 years years of stability, and we have broken out of it because of autonomic's -- of abenomics. is it the other greatest order besides janet yellen? japan has someof something different. the strength of the dollar is really a reflection of global investors wanting to be in u.s. equities, u.s. real estate, and u.s. fixed income in preference to any other developed market.
offor me, that is our quote the day, i think emerging market credit, there is a move to the exit. >> yes, it is certainly visible, and whether or not it is just a calendar issue. >> michael shaoul with us for the rest of the hour. scarlet, futures negative, dell futures --- dow futures -58. on american oil, we'll speak to but ok -- two fadel gheit. stay with us worldwide this morning. you are listening, you are watching "bloomberg surveillance ." good morning. ♪
>> this matters now to our guest host michael shaoul, things are getting slippery as the expected and the unexpected meet on oil. oil plunges. item 1 -- the debt market. whether u.s. high-yield or china's desire as we soul overnight to spruce up their market, you had better be careful out here. you and i have seen this before in spades. where would you presume we will see the event that coalesces all
the pain we have seen in the last number of weeks? is the energyry turns into a credit story as opposed to -- >> in the united states? >> and externally. in our states, russia, those are the big two, individual corporations within the emerging market space come in here domestically will you look at high yield. >> we sell preferred offering by the bank of beijing come across the bloomberg terminal. you are so good at russia. what is the state, the quality of the russian banks? >> no idea. >> we don't know, that is the key. >> no idea, and in russia, you have the geopolitical issues on top of the energy issues. i do not get any sense that russia has any interest in a default. they're willing to depreciate their currency, take that pain and move on. one of the things about the
energy story is the control, the idea that opec is in control, and anybody who has a 30-your memory will realize that when commodity markets in the energy market gets supplied, opec likes to put on a front of being in control. i do not think saudi arabia engineered this or wanted this and i do not think they by themselves have the ability to stop it. >> i've seen the rationalization it willin here because go higher eventually. the whole idea of catching a bid on oil i see absolutely no bid technically. you brilliantly said nope it's wanted. when do you know when it is going to start plunging? >> eventually markets price and the disruption -- .> and you get the distribution we do not have this yet and oil. >> exactly. you look at something like gold, which is a market hanging in there with everybody kind of trashing it.
i look at the ability of gold to hang onto that $1200 number in the face of a very strong dollar, and in the face of a great deal of liquidation in the etf space. not in the market, maybe trying to tell us it is bottoming after many years. in energy, we do not have that point. >> ok, michael shaoul with us from marketfield asset management. bids wanted. we look at china coming up. does china offer more risk or reward? stay with us worldwide. "bloomberg surveillance." ♪
>> good morning, everyone. a little deterioration in the futures market. -8. we welcome you to new york city and "bloomberg surveillance." let's get top headlines with scarlet fu. >> we have an update on the raging fire in los angeles yesterday. fire officials say a man's been arson. the blaze destroyed a massive that was underex
construction. the fire snarled rush-hour traffic. it was one of two destructive early-morning fires in california yesterday. ban onting the fraternities following the alleged 2012 gang rape at a fraternity house. the alleged sexual salt was outlined in a now discredited "rolling stone" article. and television ratings for the nfl's son and i games are rising. no, titian from amc networks -- no competition from amc network's "the walking dead." [laughter] now is onight midseason hiatus and will be returning with new episodes in february. those are your top headlines. >> for those unreal, the zombies we are seeing from "walking dead," are really people who
watch three football games back-to-back? >> i learned how to be a zombie. you have to put your head down and eyes up. that makes you look more sinister. can you get this on camera, my zombie look? >> how am i doing? >> tom is going to practice the zombie look. we are going to practice the fed. higher wages for high skilled workers. in atlanta even, that is a quote, pressure for lower skilled jobs. michael shaoul from marketfield asset management believes he has been reading it more closely than the fed. he says it is not a knockout blow, but he does see, and diane quoting him, "a gap between policy and economic reality." what are you seeing that they are missing? >> i would hate to read it as closely as the fed. into a this is turning really good employment market. we are not there yet, but we are on the way to getting there, and
there is a range of senior labor metrics, back in boom territory. payroll gains, the last 12 months of payroll gains have been greater than any other period since late 2000. i am not sure what else you need to see in order to declare victory over the labor market. >> let's talk about what you need to see. can you bring up that chart we talked about? looking at the labor market conditions index. it was created a year ago, 19 different indicators, all different kinds of measures of unemployment, part-time unemployment, the underemployed. do you think it is time to start ignoring this? >> the job of an indicator is to indicate, and this thing is going flatlined as payroll gains breakout. i think both of the leading indicators -- >> can we bring the chart backup? of see the debt, the terror
2009, and then you see nice, cyclical movement. what happened after those three cycles when it flattens out? >> what happened in 2009 is everything got terrible at the same time, so all 19 indicators collapse. when you have now is a range of labor indicators, some of which are early, some of which are late cycle. the midcycle ones are flashing normal, and the light cycle once, which is everything to do with wage gains, are still abnormally low at this point. >> this goes to michael spence some of the nobel laureate who will join us tomorrow on "bloomberg surveillance," of new york university, the 85th anniversary celebration, there is an idea of the islm architecture, which you and i studied in school. there is a real economy, which you are talking about optimism versus the money economyl. is the fed ignoring the real u.s. economy? >> the number one focus is the ability of the bond market. it is petrified of what will
happen when they alter a guidance and alter the direction of policy. i do not see a happy outcome of waiting longer. >> do you get a jump condition in interest rates when they finally confront a better american economy? >> it looks like the short end of the ones to move -- wants to move? >> 1%? thatthink you start to get one-year, two-year spread of 60, 70, 80 basis points. it is at 50 right now. >> was that enough jargon for you? it is jargon tuesday. >> thank you. , are we look at this assuming perfect fiscal policy? when you say the fed needs to back off, are we assuming congress will do its job, which is very clearly done it? >> no, i assume the gridlock is maintained. we have a reasonable ledger
deficit, there is no great need for government spending, public-sector job creation is now positive. there is nothing for fiscal policy to do out here. >> what happens when the fed meets december 17? >> i think they will find it increasingly difficult to put out a unified front and to keep considerable time and place. my guess is they will not change the language, but you may have some more dissent, whether it is competing commentary or an actual vote against the statement i am not sure. >> this is what you get at "bloomberg surveillance." shaou comes in here and talks wickedl jargon of 1-2, -- talks comes in here and 2-year spread. >> can you bring in the ghost of john maynard kang and so we can interview him tomorrow? >> i would like to do that, actually.
>> good morning. this is "bloomberg surveillance." i'm scarlet fu with tom keene and brendan greeley. let's get to our top headlines this morning. a summary of the senate intelligence committee's report on the cia's interrogation program being released today. it is expected to talk about harsh interrogation tech makes after the 9/11 attacks. calledrts what critics torture. motors down 14% over the last seven trading days on growing concern he cheapest gasoline in more than four years will curb enthusiasm for this luxury vehicles. disappointing sales forecast is also pressuring tesla. u.s. got prices have fallen for 68 days for an average of $2.68 a gallon according to aaa. a latestmes is professional athlete to voice
frustration over the eric garner case. he wore in "i can't breathe" t-shirt during warm-ups at the berkeley center. several players on both teams wore the t-shirt. the cavaliers the fetid the nets, by the way, 110-88. those are your top headlines. -- areets are crossing crashing in greece. hans nichols is with us from berlin. hans, why can't he wait, the prime minister? -- buts in his interest morning, brendan -- for some of us to have elections come earlier than later because a lot of the hard austerity measures -- it has been pretty brutal in greece. this property tax comes in in april. if you think he is going to have a hard time winning in a year, a year and a half out, it makes sense for the elections to be a little bit earlier. he has not called snap elections, but what he has done is he has called for the president's term to sort of be
reauthorized in december. that was going to be february. that could trigger new elementary elections and you could have a collapse of the government, and i will stop being a government professor and we can have a real conversation. >>t there is a risk that -- there is a risk that he can give a mandate, the last and we had to deal with a greece crisis -- what is the problem, what is the risk there? >> here is the problem on reporting on this -- there are not any accurate or up to date polls on just how strong cerise that is. they said it do not believe the polls and things are very fluid on the ground. the question is does this early presidential vote count, is this going to force the hand and is a going to force the great population to think long and hard about what they want to do syriza is very clear.
they want to open up the spending gates yet again. x michael shaoul with us, who was quite a student on europe during the crisis with marketfield asset management, michael, you look at how well italy is doing, the yields, spain, the yields under 2%. is that a good yield under 2%, or does it show the economy, not as grim as greece, but still pretty grim? government'som the perspective, below 2% is wonderful. >> what about for the people? >> spain looks like it has turned the corner. it's local real estate market, which is eviscerated, is flat on its back. nobody talks about ireland anymore when they talk about it. that is an economy that is back into bloom at territories. italy has longer, bigger fiscal issues. it's economy is still kind of bouncing around. i think it has had a lot of recovery.
athans nichols, do you look greece as a discrete and separate event? >> it is an outlier. i would put italy mourn the greek category because they have not done the structural reforms. spain has. ,heir auto sector is booming they have had sustainable growth the last three, maybe four quarters -- though i would have to check on that. i would put spain and or chuckle and a slightly different basket, italy in the middle basket, and greece the basket case if you excuse the pun. >> we have low main imf deadlines. can greece exit the imf support program? >> what they agreed to yesterday was to give him a two-month lease on life, so that if a for twol extension months, and then they will come back to a larger question of can they get out of the program. >> all right, hans nichols joining us from berlin with the latest on those political development in greece. that election is a big move.
let's get your data check. not a lot of economic data coming up on the calendar this morning. futures down by .5%, nine points on s&p futures, the 10-year yield, 2.24%, euro stronger versus the dollar, $1.2371. this is "bloomberg surveillance." i am scarlet fu here with tom keene and brendan greeley. let's bring you are morning must-reads. i have one from the "new york times," from johnson tepper, a u.k. and u.s. citizen. ps based in london. he writes why i'm giving up my passport. this has been a theme over the last year or so as the u.s. government has really cracked down on making sure people report their assets outside the u.s.. he says >> it is a huge deal. >> it is huge.
last year, 200 99 americans gave up their passports. michael shao, you live in the u.s., you're not a u.s. citizen -- you are a green card holder -- is this something that gives you pause, that the government will track you down and make you report your assets and wanting to be a u.s. citizen? green really because as a card holder, i actually have taxation with no representation ironically enough. i do think the u.s. is uniquely intrusive into the financial earnings of its citizens when they live abroad. there is a whole class of people who were born in the u.s. as kids and moved abroad as adults and never realized i simply not reporting they had money and a k have now tripped massive u.s. lability. >> there is a great cost to this. even adults have to do all of juggling, and
come to some sort of an agreement on taxes in both place where they are working. >> it is very disagreeable, but there is absolutely no sign in this environment that anybody is going to change it. it is not a new problem. what is new is the philosophy of the irs in chasing down people that may be simply misfiled. >> right. i lived abroad for 12 years, and a whole time you had to file u.s. taxes, but now what is different is the time you have to continuously file a bank account overseas even if it has $100 in it. >> scrutiny is good, but with scrutiny should come simple it's a very -- should come simplicity. that cannot be cut through. >> i think that is true. having said that, i would take citizenship with the irs over most countries given he chose. -- given the choice. >> do you look for a sign of corporate tax reform in the coming year now that we have a republican-controlled congress?
>> i think balloons will be floated, but i would be amazed if anything significant gets done between this congress and this president. >> yeah. that is something people cannot discount yet. the republicans are talking about great gains. >> and with tax form, we keep discussing whether we can do it piecemeal.. >> can this be done bit by bit? >> it will be interesting to see if they can create a working relationship. we will have to wait and see. >> politics aside, the outlook for equities, at least according ,o blackrock's larry fink is not very good. it's what he said on u.s. equities -- >> we have an equity market despite this dramatic increase in prices -- we are fair value to modestly above fair value today. we are not at the levels we saw in 2000. we are not seeing pe's where you
have true bubbles. >> he is talking to a larger site, right? >> i adore larry fink. i do not know why he does this. >> oftentimes he does sound a dour note as well. >> i would much rather jeff rosenberg than larry fink. i don't know how else to put it. >> tom has picked up the wikipedia page -- >> i thought it was gordie howe. >> the benefits available arts education, tom. you were trained at playing hockey. >> exactly. alexander the great, you know, i got it. fed policyies, in with what i thought it was having breakfast with the duchess this morning. >> look where that got you. we have more on bloomberg television. you can watch the full interview with larry fink, ceo of black
>> good morning, everyone. "bloomberg surveillance." we are -7, now -16. -132, and yields come in substantially here. some real market movement here at 42 minutes after the hour. >> it is amazing. oil prices are actually a little bit stronger. $0.55.p estate market in china seas to clients, chinese investors are looking overseas "in the loop" ancora betty liu will be
speaking with someone on this. >> that is right, steven wit koff. china has been going around the world looking for areas to put their money in, and one is property, not just here in new york but all over the united states. miami, san francisco, and in l.a. the bank of china, which by the way is financing a lot of these property deals around new york, doing a kind of undercover, they just bought seven bryant park for 600 million dollars because with all of these chinese investors coming in, they are financing these deals, they are servicing this class of investors. they are expanding. >> betty, how much is this actually as an asset and how much is an investment and their kids because a lot of them are buying houses with good water, good air, good schools? >> it is both. there is certainly an investment side to this if you look at them buying into the waldorf-astoria.
they bought a big stake in the gm building. that is an investment. you do hear about them buying properties as luxury condos for their families as well. they have got a lot of wealth, and they are looking at their future generations and where they may be. >> let me interrupt you here, betty. i cannot find a reason why markets are moving. we split in half, we have gone from -7 to -15 out of the blue. oil has not really moved. it has given it back a little bit, but this is a non-correlated move. i wonder again to greece, the grease spreads have widened out dramatically. i cannot say it is greece, but that is the only thing i have got. >> that has always been a problem with greece, it's never clear what the linkages are between greek's economy and the wider e.u. economy.
>> the european economy -- >> the stock exchanges down 11%, the biggest drop in six years according -- including the crisis. >> a headline earlier this morning about japan issuing default ratings being cut. you have a lot of moving parts as we discussed will stop in any case, betty liu will be monitoring the market of elements, including the recent lower in u.s. futures. thank you so much. comingiu, "in the loop" up 8:00 a.m. on bloomberg television. ♪
>> good morning, everyone. spence with the most important on the financial crisis, we will speak with michael spence about the new mediocrity and a number of topics. looking forward to that in our 60 block a.m. our tomorrow. we say good morning. markets on the move, -7, no big deal, all of a sudden -15 with some real turmoil. let's get to top headlines. here is scarlet. new spacecraft reaching san diego after a successful test flight ins with a plunge into the pacific ocean. a navy ship delivered the
capsule and unloaded it. orion was an unmanned flight that carried it 3600 miles above the earth. or a thousand miles an hour, temperatures near 40,000 degrees -- 20,000 miles an hour, temperatures near 4000 degrees fahrenheit. a popular serial back after being discontinued in 2006 as ereal saless -- as c declined. a facebook page devoted to its return has a most 9000 followers including one tom keene. the french toast crunch 11 national rollout and january. and he manages a toy factory at the north pole, a pilot they dangerously loaded sleigh on a global mission to reach 1.8 billion children under the age of 15. he has an annual salary of $140,000 according to insure .com. they arrived at this using waste
in our data from the labor department. those are your top headlines. using data from another country -- >> are you in the hall that a mood yet? i am not there. >> i am getting there. we need more suites on set. >> we put up a trade, and i said bad words when the tree fell down a little bit. >> that happen at our house, too. but they to put one up, stand does not work. >> i have a bump on my head from getting things out of the attic for the christmas season, yes, i am in the christmas mood. >> scarlet fu's christmas tree is 32 feet. ask that with last year. this year is higher. at the markets, deterioration, new lows, -133 on dow futures. michael shaoul of marketfield asset management saying it's wanted. you need to understand this. this is the real world about things unraveled.
some institutions, some hedge fund whatever has a thing, and they either want to or particularly they have to, they must get rid of it. they go to a major trading desk, and then what happens? >> you ask the trading desk if they want to buy it from you, then they go out to their customer base -- >> who goes outcome of the bank goes out? >> the bank's trading desk goes out. >> and you see a wire across bloomberg best says -- >> bids wanted. not difficult to understand, this thing is for sale -- >> but think there is a mystery. then the bid is not there. therere is a bit and then is an offer. it is not as reliable as it used to be, but you have a sense of where the market is. credit trades when the buyer and the seller meet in the middle. x what is the significance in chinese try to clean up and say we are not going to take
garbage paper anymore as collateral overnight in the repo market. that is where this starts, isn't it? >> china's interesting. they want to ease monetary policy, but they only want to ease it for a certain portion of the economy. they've no interest in sparking int another investment boom third tier or fourth tier credit. what they are trying to do is favorable monetary conditions, which is what we like the chinese equity market. the danger is that they constrict credit to much in the more problematic parts -- >> it is a delicate dance. >> in the end, either will have to allow a boom to take place in their equity market or a real bust take place in their court economy. i would bet they make the first mistake, not the second one. >> help me understand the role of the government financing vehicles in the chinese credit market. we do not much -- we do not know much about them. is this something waiting to explode?
>> i think it has been ground down. if you look at the chinese credit numbers, they are bifurcated between regulated credit, where you understand where it goes, bank credit, or bond issuance. anything to do with shadow financing, which has been incredibly disruptive. you imagine that there are going to be some real problems. they will not be recognized the way they were here in 2008. >> gold legging up. $1220 resistance. why is gold firm if everything else is falling apart? apartyou look at gold from any other currency and u.s. dollars, it has already broken out of its resistance band. our feeling is that gold really might be ending its bear market here. gold looks great in euros, yen, in any emerging market. >> what is the appeal of gold when we are not looking at a lot of inflation? at is ayou are looking
tremendous access of global liquidity. i think gold is much more fair to liquidity and inflation. >> i am looking back over the news out of greece -- it does not seem a major. by fatima think it takes much to i do not think it takes very much to knock european indexes down. take a dramatic headline to create a 15 handle move in the s&p. ask if you are one of our listeners with a retirement plan, are you under the desk? >> no. what i would be doing is looking at a really big am a fat income trade. bids markets are by and large fairly calm. when you want to plan for your retirement or make changes to your allocations, it is important to do it when markets are calm, not when they are
dramatic. >> that might be one way to describe the leg lowering futures. it is dramatic when you look at a chart down .8%. we will keep you posted on all of that. we want to get to our attend a -- to our agenda. >> the agenda forward is quietly about 9:00 last night, we had a snag, potomac research calls it making the sausage in washington. there is a lot here that is not a big deal, but at the same time, there is that the latest spending bill. >> this happened before december 11. >> it is a ballet. i do not think we need to make world coming to an end out of it, but it is a precursor to next year. >> what you are seeing is democrats repairing to corporate with republicans. they are going to get a continuing resolution on the one thing they care about, which is immigration policy. >> on my agenda is oil. i was exciting it to continue to slide, but it stabilized, tom. i know you have to head off to
radio. you will continue to discuss the gyrations in oil prices. >> $63.46. >> it seems to have found a bottom even as equity index futures continue to slide. we are looking at greece as a possible catalyst for the drop in athens stocks. >> my agenda is china a, and particularly's -- my agenda is china, in particular these government finance deals. it seems like this is a lot like the german latest banks that has such problems in 2007, which is you do not know what is on the books and it is not a real bank in the sense that it does not have a real liability tight to the state. >> that brings us to our twitter question of the day -- we asked everyone, and michael, jump in with your thoughts, does china offer more risk or reward? first answer -- china's reward is great when product aligns with its growing market. the risk is if products linked to freedom of information.
that is a thoughtful answer. but i think that might be too thoughtful for me. >> second 1 -- who knows, prognosticating a rigged economy that cannot be ignored forever is tough. >> that is a good point. michael shaoul, can we look at china as if we understand the fundamentals, or is a political risk there bigger than anything else we are talking about? >> no. equity markets go up when everybody talks negatively about them, and that is what it has on this year, particularly over the last two or three months. obviously not last night, but as you earlier said, that follows the 30% advance, so you cut a bit of a break there. my sense is they will try and stabilize their economy through their large cap enterprises, and i will be ultimately bullish for the index, even with this disruption. >> final answers were reporter question of the day -- does china offer more risk or reward? more risk. it took only greece to create a
show for you this morning. we are seeing a global plant led by stocks. -- global plunge led by chinese stocks. investors pouring money into new york real estate. the bank of china has agreed to buy an incomplete manhattan office tower. we will chat about the increasingly crowded new york real estate market with steven witkoff, founder and ceo of the witkoff group, a local developer. , the book publisher, wants to turn twitter into a bookstore. the next amazon, perhaps? .hey want you to buy buy buy here is a look at our top stories. a big change is coming for the fed. considerable time -- those are the two words the fed is used to describe how long interest rates are kept at record lows. the central bank may drop its phrase at a meeting next week.